Current through March 20, 2024
Authority: IC 13-14-8; IC 13-22-2-4
Affected: IC 13-22-2;
40 CFR
264.147
Sec. 8.
(a) An owner
or operator of a hazardous waste treatment, storage, recovery, or disposal
facility, or a group of such facilities, shall demonstrate financial
responsibility for bodily injury and property damage to third parties caused by
sudden accidental occurrences arising from operations of the facility or group
of facilities. The owner or operator shall have and maintain liability coverage
for sudden accidental occurrences in the amount of at least one million dollars
($1,000,000) per occurrence with an annual aggregate of at least two million
dollars ($2,000,000), exclusive of legal defense costs. This liability coverage
may be demonstrated in one (1) of the following six (6) ways:
(1) An owner or operator may demonstrate the
required liability coverage by having liability insurance as specified as
follows:
(A) Each insurance policy must be
amended by attachment of the hazardous waste facility liability endorsement or
evidenced by a certificate of liability insurance. The wording of the
endorsement must be identical to the wording specified in section 10(i) of this
rule. The wording of the certificate of insurance must be identical to the
wording specified in section 10(j) of this rule. The owner or operator shall
submit a signed duplicate original of the endorsement or the certificate of
insurance to the commissioner. If requested by the commissioner, the owner or
operator shall provide a signed duplicate original of the insurance policy. An
owner or operator of a new facility shall submit the signed duplicate original
of the hazardous waste facility liability endorsement or the certificate of
liability insurance to the commissioner at least sixty (60) days before the
date on which hazardous waste is first received for treatment, storage,
recovery, or disposal. The insurance must be effective before this initial
receipt of hazardous waste.
(B)
Each insurance policy must be issued by an insurer that, at a minimum, is
licensed to transact the business of insurance, or eligible to provide
insurance as an excess or surplus lines insurer, in one (1) or more
states.
(2) An owner or
operator may meet the requirements of this section by passing a financial test
for liability coverage as specified in subsection (e) or by using the guarantee
for liability coverage as specified in subsection (f).
(3) An owner or operator may meet the
requirements of this section by obtaining a letter-of-credit for liability
coverage as specified in subsection (g).
(4) An owner or operator may meet the
requirements of this section by obtaining a surety bond for liability coverage
as specified in subsection (h).
(5)
An owner or operator may meet the requirements of this section by establishing
a trust fund for liability coverage as specified in subsection (i).
(6) An owner or operator may demonstrate the
required liability coverage through the use of a combination of insurance,
financial test, guarantee, letter-of-credit, surety bond, or trust fund except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated must total at
least the minimum amounts required by this subsection. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one (1) such assurance as primary coverage and shall specify the other
assurance as excess coverage.
An owner or operator shall notify the commissioner in writing
within thirty (30) days whenever a claim results in a reduction in the amount
of financial assurance for liability coverage provided by a financial
instrument authorized in this subsection, a certification of valid claim for
bodily injury or property damages caused by a sudden or nonsudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage,
or disposal facility is entered between the owner or operator and third party
claimant for liability coverage under this subsection, or a final court order
establishing a judgment for bodily injury or property damage caused by a sudden
or nonsudden accidental occurrence arising from the operation of a hazardous
waste treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage under this subsection.
(b) An owner or operator of a surface
impoundment, landfill, land treatment facility, or disposal miscellaneous unit
that is used to manage hazardous waste or a group of such facilities shall
demonstrate financial responsibility for bodily injury and property damage to
third parties caused by nonsudden accidental occurrences arising from
operations of the facility or group of facilities. The owner or operator shall
have and maintain liability coverage for nonsudden accidental occurrences in
the amount of at least three million dollars ($3,000,000) per occurrence with
an annual aggregate of at least six million dollars ($6,000,000), exclusive of
legal defense costs. An owner or operator who meets the requirements of this
subsection may combine the required per occurrence coverage levels for sudden
and nonsudden accidental occurrences into a single per occurrence level and
combine the required annual aggregate coverage levels for sudden and nonsudden
accidental occurrences into a single annual aggregate level. Owners or
operators who combine coverage levels for sudden and nonsudden accidental
occurrences shall maintain liability coverage in the amount of at least four
million dollars ($4,000,000) per occurrence and eight million dollars
($8,000,000) annual aggregate. This liability coverage may be demonstrated in
one (1) of the following six (6) ways as specified in subdivisions (1) through
(6):
(1) An owner or operator may demonstrate
the required liability coverage by having liability insurance as specified in
this subdivision as follows:
(A) Each
insurance policy must be amended by attachment of the hazardous waste facility
liability endorsement or evidenced by a certificate of liability insurance. The
wording of the endorsement must be identical to the wording specified in
section 10(i) of this rule. The wording of the certificate of insurance must be
identical to the wording specified in section 10(j) of this rule. The owner or
operator shall submit a signed duplicate original of the endorsement or the
certificate of insurance to the commissioner. If requested by the commissioner,
the owner or operator shall provide a signed duplicate original of the
insurance policy. An owner or operator of a new facility shall submit the
signed duplicate original of the hazardous waste facility liability endorsement
or the certificate of liability insurance to the commissioner at least sixty
(60) days before the date on which hazardous waste is first received for
treatment, storage, recovery, or disposal. The insurance must be effective
before this initial receipt of hazardous waste.
(B) Each insurance policy must be issued by
an insurer that, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one (1) or more states.
(2) An owner or operator may meet the
requirements of this section by passing a financial test for liability coverage
as specified in subsection (e) or by using the guarantee for liability coverage
as specified in subsection (f).
(3)
An owner or operator may meet the requirements of this section by obtaining a
letter-of-credit for liability coverage as specified in subsection
(g).
(4) An owner or operator may
meet the requirements of this section by obtaining a surety bond for liability
coverage as specified in subsection (h).
(5) An owner or operator may meet the
requirements of this section by establishing a trust fund for liability
coverage as specified in subsection (i).
(6) An owner or operator may demonstrate the
required liability coverage through the use of a combination of insurance,
financial test, guarantee, letter-of-credit, surety bond, or trust fund except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated must total at
least the minimum amount required by this subsection. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one (1) such assurance as primary coverage and shall specify the other
assurance as excess coverage.
(7)
An owner or operator shall notify the commissioner in writing within thirty
(30) days whenever any of the following occurs:
(A) A claim results in a reduction in the
amount of financial assurance for liability coverage provided by a financial
instrument authorized in subdivisions (1) through (6).
(B) A certification of valid claim for bodily
injury or property damages caused by a sudden or nonsudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage,
or disposal facility is entered between the owner or operator and third party
claimant for liability coverage under subdivisions (1) through (6).
(C) A final court order establishing a
judgment for bodily injury or property damages caused by a sudden or nonsudden
accidental occurrence arising from the operation of a hazardous waste
treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage under subdivisions (1) through (6).
(8) If an owner or operator demonstrates to
the satisfaction of the commissioner that the levels of financial
responsibility required by subsection (a) or this subsection are not consistent
with the degree and duration of risk associated with treatment, storage,
recovery, or disposal at the facility or group of facilities, the owner or
operator may obtain an exemption from the commissioner. The request for
exemption must be submitted to the commissioner as part of the application
under
40 CFR
270.14 for a facility that does not have a
permit, or pursuant to the procedures for permit modification under
329
IAC 3.1-13-7 for a facility that has a permit. If
granted, the exemption must take the form of an adjusted level of required
liability coverage, with such level to be based on the commissioner's
assessment of the degree and duration of risk associated with the ownership or
operation of the facility or group of facilities. The commissioner may require
an owner or operator who requests an exemption to provide such technical and
engineering information as is deemed necessary by the commissioner to determine
a level of financial responsibility other than that required by subsection (a)
or this subsection. Any request for an exemption for a permitted facility must
be treated as a request for a permit modification under
40 CFR
270.41(a)(5) and
329
IAC 3.1-13-7.
(c) If the commissioner determines that the
levels of financial responsibility required by subsection (a) or (b) are not
sufficient for the degree and duration of risk associated with treatment,
storage, or disposal at the facility or group of facilities, the commissioner
may adjust the level of financial responsibility required under subsection (a)
or (b) as may be necessary to protect human health and the environment. This
adjusted level will be based on the commissioner's assessment of the degree and
duration of risk associated with the ownership or operation of the facility or
group of facilities. In addition, if the commissioner determines that there is
a significant risk to human health and the environment from nonsudden
accidental occurrences resulting from the operation of a facility that is not a
surface impoundment, landfill, or land treatment facility, the commissioner may
require that an owner or operator of the facility comply with subsection (b).
An owner or operator shall furnish to the commissioner, within ninety (90)
days, any information that the commissioner requests to determine whether cause
exists for such adjustments of level or type of coverage. Any adjustment of the
level or type of coverage for a facility that has a permit must be treated as a
permit modification under
329
IAC 3.1-13-7.
(d) Within sixty (60) days after receiving
certifications from the owner or operator and an independent registered
professional engineer that final closure has been completed in accordance with
the approved closure plan, the commissioner shall notify the owner or operator
in writing that the owner or operator is no longer required by this section to
maintain liability coverage for that facility unless the commissioner has
reason to believe that closure has not been in accordance with the approved
closure plan.
(e) The requirements
for a financial test for liability coverage are as follows:
(1) An owner or operator may satisfy the
requirements of this section by demonstrating that the owner or operator passes
a financial test as specified in this subsection. To pass this test, the owner
or operator shall meet the criteria of either clause (A) or (B) as follows:
(A) The owner or operator shall have the
following:
(i) Net working capital and
tangible net worth each at least six (6) times the amount of liability coverage
to be demonstrated by this test.
(ii) Tangible net worth of at least ten
million dollars ($10,000,000).
(iii) Assets located in the United States
amounting to at least:
(AA) ninety percent
(90%) of the total assets; or
(BB)
six (6) times the amount of liability coverage to be demonstrated by this test.
(B) The
owner or operator shall have the following:
(i) A current rating for the most recent bond
issuance of:
(AA) AAA, AA, A, or BBB as
issued by Standard and Poor's; or
(BB) Aaa, Aa, A, or Baa as issued by
Moody's.
(ii) Tangible
net worth of at least ten million dollars ($10,000,000).
(iii) Tangible net worth at least six (6)
times the amount of liability coverage to be demonstrated by this
test.
(iv) Assets located in the
United States amounting to at least:
(AA)
ninety percent (90%) of the total assets; or
(BB) six (6) times the amount of liability
coverage to be demonstrated by this test.
(2) As used in
subdivision (1), "amount of liability coverage" refers to the annual aggregate
amounts for which coverage is required under subsections (a) through
(b).
(3) To demonstrate that the
owner or operator meets this test, the owner or operator shall submit the
following to the commissioner:
(A) A letter
signed by the owner's or operator's chief financial officer and worded as
specified in section 10(g) of this rule. If an owner or operator is using the
financial test to demonstrate both assurance for closure or post-closure care,
as specified by sections 4(g) and (6)(g) of this rule, and liability coverage,
the owner or operator shall submit the letter specified in section 10(g) of
this rule to cover both forms of financial responsibility. A separate letter as
specified in section 10(f) of this rule is not required.
(B) A copy of the independent certified
public accountant's report on examination of the owner's or operator's
financial statements for the latest completed fiscal year.
(C) A special report from the owner's or
operator's independent certified public accountant to the owner or operator
stating the following:
(i) The independent
certified public accountant has compared the data that the letter from the
chief financial officer specifies as having been derived from the independently
audited, year-end financial statements for the latest fiscal year with the
amounts in such financial statements.
(ii) In connection with that procedure, no
matters came to the attention of the independent certified public accountant
that caused the independent certified public accountant to believe that the
specified data should be adjusted.
(4) An owner or operator of a new facility
shall submit the items specified in subdivision (3) to the commissioner at
least sixty (60) days before the date on which hazardous waste is first
received for treatment, storage, recovery, or disposal.
(5) After the initial submission of items
specified in subdivision (3), the owner or operator shall send updated
information to the commissioner within ninety (90) days after the close of each
succeeding fiscal year. This information must consist of all three (3) items
specified in subdivision (3).
(6)
If the owner or operator no longer meets the requirements of subdivision (1),
the owner or operator shall obtain insurance, a letter-of-credit, a surety
bond, a trust fund, or a guarantee for the entire amount of required liability
coverage as specified in this section. Evidence of liability coverage must be
submitted to the commissioner within ninety (90) days after the end of the
fiscal year for which the year-end financial data reflects that the owner or
operator no longer meets the test requirements.
(7) The commissioner may disallow use of this
test on the basis of qualifications in the opinion expressed by the independent
certified public accountant in the report on examination of the owner's or
operator's financial statements. (See subdivision (3)(B).) An adverse opinion
or a disclaimer of opinion is cause for disallowance. The commissioner shall
evaluate other qualifications on an individual basis. The owner or operator
shall provide evidence of insurance for the entire amount of required liability
coverage as specified in this section within thirty (30) days after
notification of disallowance.
(f) The requirements for a guarantee for
liability coverage are as follows:
(1) Subject
to subdivision (2), an owner or operator may meet the requirements of this
section by obtaining a written guarantee, hereinafter referred to as guarantee.
The guarantor shall be the direct or higher tier parent corporation of the
owner or operator or a firm whose parent corporation is also the parent
corporation of the owner or operator. The guarantor shall meet the requirements
for owners or operators in subsection (e). The wording of the guarantee must be
identical to the wording specified in
329
IAC 3.1-14-34. A certified copy of the guarantee must
accompany the items sent to the commissioner as specified in subsection (e)(3).
One (1) of these items must include the letter from the guarantor's chief
financial officer. If the guarantor's parent corporation is also the parent
corporation of the owner or operator, the letter must describe the value
received in consideration of the guarantee. The terms of the guarantee must
provide the following:
(A) If the owner or
operator fails to satisfy a judgment based on a determination of liability for
bodily injury or property damage to third parties caused by sudden or nonsudden
accidental occurrences, or both as the case may be, arising from the operation
of facilities covered by this guarantee, or fails to pay an amount agreed to in
settlement of claims arising from or alleged to arise from such injury or
damage, the guarantor shall satisfy the judgment or pay the amount agreed to in
settlement of claims up to the limits of coverage.
(B) The guarantee must remain in force unless
the guarantor sends notice of cancellation by certified mail to the owner or
operator and to the commissioner. The guarantee may not be terminated unless
and until the commissioner approves in writing alternate liability coverage
complying with
329 IAC
3.1-14-24 or this section.
(2) In the case of the corporations
incorporated in the United States, a guarantee may be used to satisfy the
requirements of this section only if:
(A) the
attorney general or insurance commissioner of the state in which the guarantor
is incorporated; and
(B) the
attorney general or insurance commissioner of Indiana;
have submitted a written statement to the commissioner that a
guarantee executed as described in this section and
329
IAC 3.1-14-34 is a legally valid and enforceable
obligation in that state.
(3) In the case of the corporations
incorporated outside the United States, a guarantee may be used to satisfy the
requirements of this section only if:
(A) the
non-U.S. corporation has identified a registered agent for service of process
in Indiana and in the state in which it has its principal place of business;
and
(B) the attorneys general or
insurance commissioners of Indiana and the state in which the guarantor
corporation has its principal place of business have submitted a written
statement to the commissioner that a guarantee executed as described in this
section and
329
IAC 3.1-14-34 is a legally valid and enforceable
obligation in that state.
(g) The requirements for a letter-of-credit
for liability coverage are as follows:
(1) An
owner or operator may satisfy the requirements of this section by obtaining an
irrevocable standby letter-of-credit that conforms to the requirements of this
section and by submitting a copy of the letter-of-credit to the
commissioner.
(2) The financial
institution issuing the letter-of-credit must be an entity that has the
authority to issue letters-of-credit and whose letter-of-credit operations are
regulated and examined by a federal or state agency.
(3) The wording of the letter-of-credit must
be identical to the wording specified in
329
IAC 3.1-14-37.
(4) An owner or operator who uses a
letter-of-credit to satisfy the requirements of this section may also establish
a standby trust fund. Under the terms of such a letter-of-credit, all amounts
paid pursuant to a draft by the trustee of the standby trust must be deposited
by the issuing institution into the standby trust in accordance with
instructions from the trustee. The trustee of the standby trust fund must be an
entity that has the authority to act as a trustee and whose trust operations
are regulated and examined by a federal or state agency.
(5) The wording of the standby trust fund
must be identical to the wording specified in
329
IAC 3.1-14-40.
(h) The requirements for a surety bond for
liability coverage are as follows:
(1) An
owner or operator may satisfy the requirements of this section by obtaining a
surety bond that conforms to the requirements of this section and by submitting
a copy of the bond to the commissioner.
(2) The surety company issuing the bond must
be among those listed as acceptable sureties on federal bonds in the current
Circular 570 of the U.S. Department of the Treasury.
(3) The wording of the surety bond must be
identical to the wording specified in
329
IAC 3.1-14-38.
(4) A surety bond may be used to satisfy the
requirements of this section only if:
(A) the
attorney general or insurance commissioner of the state in which the surety is
incorporated; and
(B) the attorney
general or insurance commissioner of Indiana;
have submitted a written statement to the commissioner that a
surety bond executed as described in this subsection and
329
IAC 3.1-14-38 is a legally valid and enforceable
obligation in that state.
(i) The
requirements for trust fund for liability coverage are as follows:
(1) An owner or operator may satisfy the
requirements of this section by establishing a trust fund that conforms to the
requirements of this section and by submitting an originally signed duplicate
of the trust agreement to the commissioner.
(2) The trustee shall be an entity that has
the authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency.
(3) The trust fund for liability coverage
must be funded for the full amount of the liability coverage to be provided by
the trust fund before it may be relied upon to satisfy the requirements of this
section. If at any time after the trust fund is created the amount of funds in
the trust fund is reduced below the full amount of the liability coverage to be
provided, the owner or operator, by the anniversary date of the establishment
of the fund or within one hundred twenty (120) days of the reduction, whichever
is sooner, shall either add sufficient funds to the trust fund to cause its
value to equal the full amount of the liability coverage to be provided or
obtain other financial assurance as specified in this section to cover the
difference. As used in this subsection, "the full amount of the liability
coverage to be provided" means the amount of coverage for sudden, nonsudden, or
sudden and nonsudden occurrences required to be provided by the owner or
operator by this subsection, less the amount of financial assurance for
liability coverage that is being provided by other financial assurance
mechanisms being used to demonstrate financial assurance by the owner or
operator.
(4) The wording of the
trust fund must be identical to the wording specified in
329
IAC 3.1-14-39.
